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MyMISLab
3-5. Jeff Bezos, CEO of Amazon.com, has stated that
FBA Costs 16
the best customer support is none. What does that
Order handling (per order) $1.00 mean?
Pick & pack (per item) $1.04 3-6. Suppose you work for Amazon or a company that

Weight handling (per Between $0.50 for less than 1 takes innovation as seriously as Amazon does. What
pound) pound, to $1.59 plus $0.39 per do you suppose is the likely reaction to an employee
pound for items over 2 pounds who says to his or her boss, “But, I don’t know how to
do that!”?
Storage (cubic foot per $0.51 between January and
month) September and $0.68 from 3-7. Using your own words and your own experience, what
October to December
skills and abilities do you think you need to have to
thrive at an organization like Amazon?
If goods are sold via Amazon.com, Amazon uses its own
information systems to drive the order fulfillment process. How- 3-8. What should UPS and FedEx be doing in response to
ever, if the goods are sold via an FBA customer’s sales chan- Amazon.com’s interest in drone delivery?
nel, then the FBA customer must connect its own information 3-9. Summarize the advantages and disadvantages for brick-
systems with those at Amazon. Amazon provides a standard- and-mortar retailers to sell items via Amazon.com.
ized interface by which this is done called Amazon Market- Would you recommend that they do so?
place Web Service (MWS). Using Web-standard technology (see
Chapter 6), FBA customers’ order and payment data are directly 3-10. If a brick-and-mortar retailer were to use FBA, what
linked to Amazon’s information systems. business processes would it not need to develop? What
FBA enables companies to outsource order fulfillment to costs would it save?
Amazon, thus avoiding the cost of developing their own pro- 3-11. If a brick-and-mortar retailer were to use FBA, what in-
cesses, facilities, and information systems for this purpose. formation systems would it not need to develop? What
costs would it save?
QUeStionS 3-12. If a brick-and-mortar retailer were to use FBA, how
would it integrate its information systems with Ama-
3-4. Based on the facts presented in this case, what do you zon’s? (To add depth to your answer, Google the term
think is Amazon.com’s competitive strategy? Justify Amazon MWS.)
your answer.

MyMISLab ™
Go to the Assignments section of your MyLab to complete these writing exercises.
3-13. Saeed has come up with what he hopes is a great idea. He has developed a
smart phone app that can be used use to find all the ingredients in a food store
that you need for your chosen recipe. It uses a clever combination of bar codes
and GPS tracking. Saeed intends to create bespoke versions of the app for each
of the major grocery chains.
Very soon Saeed realizes that not only will the chains not return his calls,
but that many of them have their own cut-down versions aimed at increasing
sales and flow around their stores.
a. Explain how an understanding of the basics of the grocery industry would
have alerted Saeed to the difficulties he is now facing.
b. Where do you think that Saeed’s app might fit into the value chain, if it has
a place?
c. How would Saeed’s app fit into the business process system and at what
stage?
d. Explain Saeed’s competitive strategy and how an analysis of Porter’s five
forces model would benefit him.